East Penn Financial Report: Bad Economy Saves Money

There was a lot of talk about what East Penn School Board President Charles Ballard called “the boring financial stuff” at Monday night’s East Penn School Board meeting.

Scott Schearer, managing director for the Harrisburg-based Public Financial Management firm, made a presentation to the board on the district's financial portfolio, pointing out the silver lining in a bad economy -- low interest rates on the district’s debt.

While the district isn’t earning too much on the revenue side of things, Shearer said, it has also saved about $6 million in interest over the past 7 or 8 years. Variable interest rates were projected at about 4 percent and have been much lower than that, he explained.

East Penn’s debt portfolio is about 71 percent fixed rate and 29 percent variable rate, Shearer said.

Shearer said that he will speak to the board next month about a potential bond refinancing that will be possible in January 2012.

In other business, Superintendent of Schools Thomas L. Seidenberger mentioned property tax rebates given to senior citizens as a contributing factor in the school district’s financial problems.

He said that the $171,447 in rebates paid out in 2010-11 would have paid for the salary and benefits of two teachers and an instructional aid.  He then said that some tough decisions may need to be made in the next budget cycle.